The world of search is getting a little complicated. Savvy search marketers are buying their competitors' key words and their competitors' corporate names when available. Automated key-word bidding programs are coming under scrutiny because bidding software artificially inflates the price the major search engines charge their customers.
Much like bidding on an item on eBay, Company X knows that if it bids just under the keyword price of its competitor, Company Y, it will maximize the price that Company Y will have to pay for that keyword. Then Company Y does the same thing to Company X, driving its keyword prices up. As this cycle repeats, the search engines reap the benefits and advertisers get the shaft.
And then there's click fraud. On March 8, Google, without admitting or denying wrongdoing, agreed to pay $90 million to settle its part of an industrywide lawsuit alleging search companies charged advertisers for clicks that weren't from real customers. Some search experts estimate that click fraud could account for as much as a third of all clicks.
So what's an advertiser to do to combat the problems bubbling to the surface with search? Many ad executives predict that banner and video-display advertising will outpace search advertising this year. According to Jeff Lanctot, general manager at interactive ad agency Avenue A | Razorfish, the big Web spenders in the car, movie and packaged-goods categories are already allocating a bigger portion of their budgets to display.
Creative on the Web is light-years ahead of where it was 10 years ago. Banners come alive and expand with mouse rollovers. Video commercial messages launch on full screens. If advertisers are selective about the sites they advertise on, they can benefit from the branding, whether the Web visitors click on their ads or not.
Dan McKillen is president of the HealthDay News Service